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Revenue Sharing

Definition

Revenue Sharing is a business model where income generated from a product, service, or platform is distributed among stakeholders according to predefined terms. In the cryptocurrency ecosystem, this can manifest in various forms, such as yield farming protocols distributing transaction fees to liquidity providers or decentralized autonomous organizations (DAOs) allocating profits to token holders. It serves as an incentive mechanism to encourage participation and investment within a given project. The specifics of the distribution are typically governed by smart contracts.